The UK government is planning substantial reforms to health and disability benefits, including Personal Independence Payment (PIP). By 2025, millions of claimants will experience a series of changes aimed at streamlining processes, managing costs, and improving claimant support. Here are six key changes to watch for.
Adjustments to Payment Dates for the New Year
Starting in 2025, Personal Independence Payment (PIP) schedules will undergo slight adjustments to accommodate the New Year bank holidays, ensuring that all payments are processed smoothly despite disruptions. These changes are designed to maintain consistency and prevent delays for millions of recipients across the UK.
- Payments scheduled for Wednesday, January 1, 2025, will be moved forward to Tuesday, December 31, 2024.
- Payments will return to their regular schedule from Thursday, January 2, except in Scotland, where most benefits will also arrive earlier on December 31.
This change aims to ensure claimants receive their benefits promptly during the holiday period.
End of the Motability £750 Payment
The £750 New Vehicle Payment under the Motability Scheme will be discontinued for orders placed after January 3, 2025. This temporary payment was introduced to mitigate the rising costs of new vehicles caused by global shortages.
- A £100 New Product Payment for mobility aids like scooters and wheelchairs will also be discontinued.
- Claimants will now need to use their benefits or personal funds for upfront costs.
This change affects individuals relying on enhanced mobility components of PIP, Disability Living Allowance (DLA), and other disability-related benefits.
Comprehensive Reform of Disability Benefits
The government aims to overhaul the health and disability benefits system. A consultation is planned for spring 2025, focusing on measures to:
- Improve support for individuals entering or remaining in work.
- Address the rising costs of disability benefits, which are projected to grow from £21.6 billion in 2023/2024 to £35.3 billion by 2028/2029.
The Department for Work and Pensions (DWP) has pledged to incorporate feedback from disabled individuals and their representatives. Specific proposals, including controversial suggestions like replacing cash benefits with vouchers, remain under review.
Increase in Payment Rates Starting April 2025
PIP and other benefits will see a 1.7% increase in payment rates, an adjustment made to align with the September inflation figure. This increase is part of the government’s broader efforts to ensure benefits keep pace with the rising cost of living, providing additional support to those with long-term physical or mental health conditions. This adjustment includes :
- Daily living component:
- Standard rate: £73.90 (up from £72.65).
- Enhanced rate: £110.40 (up from £108.55).
- Mobility component:
- Standard rate: £29.20 (up from £28.70).
- Enhanced rate: £77.05 (up from £75.75).
For those eligible for both enhanced components, the maximum award will rise from £737.20 to £749.80 every four weeks.
Study on Claimant Spending Habits
The DWP will conduct a new survey in 2025 to better understand how PIP recipients use their payments. This research aims to address concerns about whether the benefit adequately covers disability-related costs.
- Representatives from disability charities and academics will guide the project.
- Findings are expected in summer 2025.
According to Scope, a leading disability equality charity, disabled individuals face average additional costs of £1,010 per month, highlighting the need for accurate benefit adjustments.
Funding Boost to Support Employment for Disabled Individuals
A £3.5 million funding initiative will target 17 NHS areas, including Birmingham and Solihull, to develop innovative treatments for musculoskeletal conditions, a leading cause of work absence.
- There are 2.8 million economically inactive individuals due to long-term illness, with 646,000 citing musculoskeletal disorders as their primary condition.
- The funding aims to improve health outcomes and help more people return to work.
